- Paul Edelstein, U.S. economist and director of financial economics at IHS Global Insight
Strengthening US economy as well as rising employment helped boost tax receipts, leading to a narrower budget deficit in November compared with the same period in the previous year, according to the Treasury Department. Washington spent $56.8 billion more than it received, compared with a $135.2 billion shortfall last year. After suffering from years of sluggish growth, America's economy has appeared to fire its engines this year even as the global economic growth has slowed. Hiring by American employers has picked up, as a Labor Department report last week showed the economy created 321,000 jobs in November, marking 10 months in a row in which the number has exceeded 200,000. Solid employment pace has helped to shrink the country's annual deficit from a record $1.42 trillion in 2009, and economists forecast the drop to continue in the fiscal year that started on October 1. Moreover, the US government is no longer sticking to harsh austerity measures that undermined growth last year through tax increases and spending cuts.
The Treasury in October said the government had accumulated a budget shortfall of $483 billion, or 2.8% of gross domestic product in the 12 months through September 30, the least since 2008. The Congressional Budget Office said in August that it expects the deficit to shrink to 2.6% of GDP this fiscal year.
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